July 5th, 2007

The iPhone might never be free of AT&T

Posted by Adrian Kingsley-Hughes @ 5:16 am

Categories: Apple, DRM

Tags: Apple iPhone, Network, AT&T Corp., Apple Inc., Adrian Kingsley-Hughes

I’ve been taking a look around the web at the efforts by hackers to free the iPhone from the AT&T shackles so that it could be used as an iPod or with other network providers, both in the US and abroad. I’ve come to the conclusion that while it might be possible to unlock the iPhone, it’ll never be truly free of AT&T. Here’s why.

For each new AT&T customer that signs up, Apple gets a cut. It’s the gift that keeps on giving.The iPhone has changed how cellphones are sold, and when you look closely at the implications of this change, you’ll see that it’s not for the better. So far the model that we’ve seen is that the networks offer customers heavily discounted cellphones as a lure to sign up to an extended contract with the network. The discounted cellphone will be hardware locked to the network. Now, it is possible to unlock phones. Most network operators will do this for you for a fee (after your contract is up, of if you choose to end the contract early and pay an additional fee) or you can take the third-party route and get your phone unlocked without the network provider’s knowledge. Either way, once the phone is unlocked, you’re free of the network.

Steve Jobs, being the disruptive bloke that he is, has tweaked this model dramatically in such a way that Apple and AT&T benefits and the customer loses out. The iPhone is one of the most DRM-ladened gadgets to hit shelves. It’s designed that way. Apple generated a huge amount of hype surrounding the gadget which in turn created an unprecedented demand. Anyone wanting an iPhone has to buy one from Apple and if they want to use it for anything (even as an iPod) they have to sign up to AT&T for two years, and for each new AT&T customer that signs up, Apple gets a cut. It’s the gift that keeps on giving.

But the iPhone is not just software-locked to Apple’s chosen network, it’s hardware locked too. Don’t believe me? Then try connecting an iPhone to a CDMA2000 network such as offered by Sprint or Verizon. You can’t, and that’s because the phone doesn’t support it on a hardware level. Even if hackers can succeed in unlocking the iPhone software updates that are drip-fed to the device via iTunes will periodically restore the system image and these will undoubtedly come with more sophisticated network locks. Sure, hackers will be able to overcome these new “features,” but until they do, your $600 AT&T-free iPhone will be nothing more than an iPaperweight. Even if you could completely break free of AT&T’s grip, you’re left with a phone that still only feels at home on a third-world style network. Any iPhones that see light of day in Europe or Japan are going to have to support 3G, but these will be equally locked and bound to networks in those countries (so, for example, the UK iPhone will probably be bound to O2).

An added complication is that you’re unlikely to see AT&T or Apple offering iPhone unlock codes to customers wanting to break free. These codes would be a weak link in the DRM chain and make it easier for customers to defect from AT&T en masse, costing both AT&T and Apple.

Also, I keep thinking about what provisions AT&T and Apple might have put in place for weeding out iPhones sold but not connected to the network. It’s quite possible that these phones could be identified (using the IMEI number) and banned, effectively bricking them. Since it’s a case of Apple and AT&T protecting their profits, I wouldn’t put anything past them.

The iPhone has changed the way cellphones are sold, and not in a good way. Apple has introduced high levels of DRM to a piece of consumer electronics that previously had ineffective and loosely-guarded DRM. And since hundreds of thousands of customers have merrily blundered into a new era of DRM, it’s likely that other networks and cellphone manufacturers will follow suit.

Thanks Steve!

Thoughts?